The GAME Group's woes could continue, thanks to a global slump in the games market which shows no sign of slowing.
The global game market continues to slip, with market watcher NPD Group claiming a drop of 25 per cent in March alone - despite the high-profile launch of BioWare's Mass Effect 3.
NPD's figures suggest that the global market for computer and video games continues to slide, following a claimed drop of 20 per cent in February and 34 per cent in January compared to the same period last year. In real figures: the global games market in March was worth a mere £690 million compared to £922 million this time last year.
The drop comes across the entire gaming market: hardware dropped 35 per cent, software 25 per cent and even accessories - typically a money-maker for high-street retailers thanks to easy upsell potential and high margins - were down 8 per cent year-on-year despite increased shipments, as margins are squeezed across the channel.
Not everything shrank in March, however. 'Outside of new physical retail sales, we find that the consumer spend on content on used games, rentals, subscriptions, mobile games, social network games, digital full game downloads, and add-on content accounted for an additional $2.5 billion to $2.7 billion across the US, UK, France, and Germany in Q1 2012,
' NPD analyst Anita Frazier explained in a report to investors.
The massive drop in turnover for the games industry comes at a bad time: GAME Group was forced to close 277 of its stores ahead of a buy-out from the OpCapita investment group, due to an unusually slow Christmas period. With OpCapita needing to keep the creditors on-side, it needs to see growth in the games market - not the continued slump NPD's figures demonstrate.
There are a few bright spots to be found in NPD's report: BioWare's Mass Effect 3 managed to sell more than twice as many copies as its predecessor in its first month, suggesting that there's still room in the shrinking market for a triple-A title to do well. Non-traditional accessories, including stored-value points cards, subscription cards and character packs for RFID-based collectible game Skylanders, also showed growth and accounted for seven of the top ten best-selling accessories for the month.
There's a key metric missing from NPD's analysis, however: digital distribution. The research outfit readily admits that its figures do not reflect sales made through publishers own-brand digital distribution services, like Valve's Steam or EA's Origin, hiding potential growth for the market. While NPD is working with fellow researcher EEDAR to get a handle on digital distribution figures, accurate results won't be available until a future report.
Should the disappearing sales prove to be simply moving to digital distribution platforms, the games market may not be in quite so parlous a state as NPD's research indicates. Such a move, however, would prove devastating for high-street retailers - including OpCapita's latest investment - if it continues at its present pace.